On the Trends of Technology, Family Formation, and Women’s Time Allocation

Advanced economies have experienced a sharp decline in fertility and marriage rates over the past several decades, alongside rising educational attainment and substantial shifts in women’s time allocation. To investigate the forces behind these trends, we develop a quantitative general equilibrium model with endogenous marriage, fertility, educational investment, and women’s time use. The model incorporates factor-neutral, skill-biased, and gender-biased technological change, which jointly determine the wage structure and the trade-offs households face. Calibrating the model to Japan, we find that skill- and gender-biased technological change jointly account for about 30% of the decline in fertility between 1970 and 2020, with technologies favoring female labor supply explaining most of this effect. These forces operate through higher opportunity costs of childrearing and weaker incentives to marry. Counterfactual experiments show that ignoring the joint determination of education and time allocation leads to substantial misattribution of the drivers of fertility decline. Together, the results demonstrate that understanding long-run demographic change requires a unified framework that integrates these interconnected household decisions.